E-Commerce to Take Up 20% of the Indonesian Retail Market
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The Trade Ministry said that the e-commerce business has a chance of capturing 20 percent of the conventional retail market. The scouring of conventional retail markets is likely to happen given the fact that customers are now more familiar and accustomed with online shopping, due to its time and budget efficiencies.
“This phenomenon must be supported by adequate policies and infrastructure,” Srie Agustina, the ministry’s acting director general of domestic trading, said during the Indonesian E-Commerce Summit and Exhibition in Serpong, Banten, yesterday.
Srie estimated that the e-commerce industry will take over 20 percent of the conventional retail market share in the next four years. Right now, e-commerce’s share in the conventional retail market is five percent.
At the E-Commerce Summit opening yesterday, President Joko Widodo warned local e-commerce businesses about the “attack” of foreign players. According to the President, the acquisition of Southeast Asia’s popular online shopping site Lazada by China’s e-commerce giant Alibaba two weeks ago is something that industry players must keep an eye on. “It’s a warning for everyone.”
Alibaba announced that it has acquired Rocket Internet’s stake in Lazada worth US$1 billion (Rp13 trillion). The takeover strengthens Alibaba’s position in the e-commerce markets of Asia and the world. The acquisition allows Alibaba to reach 560 million online consumers in Southeast Asia, including Indonesia.
To boost the quality the domestic e-commerce industry, the Trade Ministry will mandate online trade sites to register with the ministry.
The Indonesia E-Commerce Association (IDEA) is planning for an accreditation of e-commerce sites, in a bid to improve the quality and credibility of local e-commerce players. The accreditation assessment will begin in June carried out on 200 sites online sales-and purchase businesses. The assessment categories include operational sites, clarity payment, and customer service aspects.
Earlier, Minister of Communications and Informatics Rudiantara expressed his optimism that the retail e-commerce business this year can record a transactions deals total of US$20 billion or around Rp260 trillion.
Questions & Answers
Q.What initiatives are being planned to improve the quality of Indonesia's e-commerce industry?
What initiatives are being planned to improve the quality of Indonesia's e-commerce industry?
The Trade Ministry will mandate online trade sites to register, and the Indonesia E-Commerce Association (IDEA) plans to accredit e-commerce sites. This accreditation aims to enhance the quality and credibility of local players.
Q.Which specific aspects will be assessed during the planned accreditation of e-commerce sites?
Which specific aspects will be assessed during the planned accreditation of e-commerce sites?
The accreditation assessment will cover operational sites, clarity of payment processes, and customer service aspects. This is intended to improve the overall quality and trustworthiness of local e-commerce businesses.
Q.Why did President Joko Widodo warn local e-commerce businesses about foreign players?
Why did President Joko Widodo warn local e-commerce businesses about foreign players?
The President's warning followed China's Alibaba acquiring Southeast Asia's Lazada two weeks prior. This takeover strengthens Alibaba's market position, reaching 560 million online consumers across the region.
Q.When is the assessment for the accreditation of e-commerce sites due to begin?
When is the assessment for the accreditation of e-commerce sites due to begin?
The assessment process for the accreditation of e-commerce sites is scheduled to commence in June. It will be carried out on 200 online sales and purchase businesses to evaluate their quality.
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